Former St. Clair Fire Chief Eric Hinson Gets 35 Months

Former St. Clair Fire Protection District Chief and Treasurer Eric Hinson was sentenced to 35 months in prison on Thursday morning after he pleaded guilty earlier this year to one felony count of fraud and five felony counts of tax evasion.

United States District Court Judge E. Richard Webber sentenced Hinson. Webber is the federal judge for the U.S. District Court for the Eastern District of Missouri.

Hinson also was ordered to pay $615,298 in restitution. Of that amount, $515,298 will go to the fire district while the other $100,000 will be returned to the bonding company, board President Robin Jobe told The Missourian late Thursday morning.

Hinson’s guilty plea in February came after his Jan. 9 indictment on fraud and multiple tax evasion charges involving his alleged misuse of about $593,236 of district funds between January 2006 and September 2011.

“We are pleased that justice has prevailed and remain hopeful the district will recoup all of the missing funds,” the SCFPD board of directors said in a prepared statement after the sentencing. “The investigation was never about a single person but an effort to establish accountability for the funds of the St. Clair Fire Protection District.”

The statement continued by saying that, “We will do everything possible to restore the trust of the taxpayers of the district.”

The statement also made mention of the restitution, which Jobe said already has been paid in full. He told The Missourian shortly after the sentencing that the court has received a check from Hinson for the amount. He said he expects the court to reissue the check to the fire district.

“Action will be taken to collect upon all sums which were misappropriated,” the board’s prepared statement stated. “... The administration of the fire district acted upon its fiduciary duty to the taxpayers to follow this investigation all the way through to the conclusion.”

The current board is comprised of Jobe, Treasurer Dave Berkel and Secretary Kirby Banderman.

Hinson’s sentencing hearing was delayed twice. It originally was scheduled for May 2, but first was moved to June 6 upon request of Hinson’s attorneys. Webber himself then delayed the date another week because of a scheduling conflict.

Jobe said the sentencing took about 90 minutes. Berkel and Office Manager Anna Marie Short read statements before the sentence was announced.

“This investigation and proceeding has been going on for some 22 months with much anticipation due to the stress and emotions tied to the actions, lies, deceit and greed of Eric Hinson,” Berkel said in court on Thursday. “This crime by Eric Hinson has impacted more people than we will ever know. The impact alone to board members and politicians throughout the state is staggering.

“The taxpayers’ trust today is very hard to gain, and this is just another crime that blemishes that trust. Taxpayers elect people to represent them and to have their best interest in mind, and Eric Hinson let greed and deceit change all of that.”

Published reports stated that Hinson’s lawyer, Catherine Hanaway, said that the district’s claims about certain things were an “exaggeration.”

Hinson also read a prepared statement in which he admitted guilt and apologized to the district and community, Jobe said.

The FBI, which was involved in the investigation, released a short statement after the sentencing was delivered.

“The people of the city of St. Clair should applaud their fire department for their integrity,” said Dean C. Bryant, special agent in charge of the FBI St. Louis Division. “The fire department itself exposed the crime of their former boss at the expense of their department’s reputation knowing it was the right thing to do.”

Hinson Involvement

Last September it was revealed that only Eric Hinson was involved in the fire district investigation that was spearheaded by the U.S. District Attorney’s Office and the Internal Revenue Service Criminal Investigation unit.

Additionally, Hinson filed false tax returns for the years 2006 through 2010, leaving total additional taxes due of $132,383, a press release stated.

“The forensic audit named one individual as being responsible for misappropriation of district funds and details deliberate manipulation of the accounting system to conceal such from other officials and the accountant(s) for the district,” the board’s statement said.

The statement also stated that since public officials are required to be bonded, the district filed a claim with the bonding company and it has been reimbursed $100,000, which was the full amount of the bond.

“The district has taken many steps, in consultation with our auditor, to make sure this situation will never happen again,” the board’s statement reads.

Hinson’s maximum prison time could have been 20 years and a fine of $250,000 for the fraud charge. Each count of tax evasion carried a maximum penalty of five years and a fine of up to $100,000. In determining the actual sentence, however, a judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.

Jobe said after Webber conducted all of his research involving the case, his sentencing range for Hinson was 35 to 41 months.

“In rural Missouri volunteer fire personnel are the backbone of public safety when it comes to our homes and property,” U.S. Attorney Richard Callahan said. “Aside from our thanks, they deserve much better than this from their leaders.”

The St. Clair Fire Protection District primarily is funded by public funds.

Background

The case was investigated by the St. Clair Police Department, Federal Bureau of Investigation and Internal Revenue Service Criminal Investigation,with the assistance of the St. Clair Fire Protection District. Assistant Attorney Hal Goldsmith handled the case for the U.S. Attorney’s Office.

According to published reports, Goldsmith said in court filings that an “arrogant” Hinson treated the district’s coffers “as his own personal piggy bank.”

The end of Berkel’s statement Thursday summed up some of his feelings.

“I always felt that Eric was a friend and a respected and trustworthy firefighter, but Eric has deceived that respect and trust forever, he said. “At the conclusion of this hearing we will hopefully get justice for the taxpayers and department members of the St. Clair Fire Protection District.”

Hinson began with the district as a volunteer firefighter in 1985, was elected to the board of directors in 1997 and as treasurer of the district in 1999. In January 2011, he became the district fire chief. He resigned on Sept. 28, 2011, the same day the investigation was launched.

As treasurer, Hinson was responsible for preparing the annual budgets, facilitating the annual financial statement audit, gaining approval from the board for expenditures, reconciling bank statements and performing other accounting-related activities, in the QuickBooks general ledger system, other than for payroll. He also had the ability to access the QuickBooks system remotely from outside the district offices.

According to court documents, Hinson used district credit cards to pay for family vacations to Hawaii and Florida; to pay for personal merchandise such as sporting goods and other items; limousine rentals; tickets to Six Flags, Big Surf Water Park and other entertainment expenses; restaurant meals; gasoline; and hotel rooms as well as to obtain significant cash advances. Without the knowledge and authority of the district, Hinson directed that these personal credit card charges be paid with district funds.

Further, on several occasions, Hinson wrote district checks to pay for his own personal expenses, including to Ford credit for a pickup truck, to Macy’s for furniture, to John Deere credit for tractor parts and to Bank of America and Fifth Third Bank for other personal expenses.

In order to conceal his scheme, documents stated that Hinson accessed the district’s QuickBooks to alter reported general ledger activity by backdating certain of his fraudulent transactions and by changing the payee in order to manipulate the accounting records so as to hide the existence of his fraudulent transactions.

As part of the sentencing process for Hinson, several individuals from within the district sent impact statements to Webber. They included board member Kirby Banderman and former board member Danny Gossett, Berkel, Short, Interim Chief Mike Kelley, Deputy Chief Craig Sullivan, Lt. Jason Hatley, Dale Sullivan, Larry Lawrence, Nolan Sanders, Edwin Berkel and Tim Wideman.